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Presence of Check‐Off Programs and Industry Concentration in the Food Manufacturing Sector

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  • Lee L. Schulz
  • John M. Crespi

Abstract

The authors examine industry concentration for the U.S. food manufacturing sector. This study is the first to examine whether particular subsectors within the food manufacturing industry, which operate in the presence of industry-funded check-off programs such as marketing orders, are more or less concentrated than industries without such research and marketing programs. The authors find evidence to the hypothesis that industries with demand-enhancing check-off programs have lower concentration relative to industries without these programs.
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  • Lee L. Schulz & John M. Crespi, 2012. "Presence of Check‐Off Programs and Industry Concentration in the Food Manufacturing Sector," Agribusiness, John Wiley & Sons, Ltd., vol. 28(2), pages 148-156, March.
    • Handle: RePEc:wly:agribz:v:28:y:2012:i:2:p:148-156
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    1. Ben C. French, 1982. "Fruit and Vegetable Marketing Orders: A Critique of the Issues and State of Analysis," American Journal of Agricultural Economics, John Wiley & Sons, vol. 64(5), pages 916-923, December.
    2. Hayley H. Chouinard & David E. Davis & Jeffrey T. LaFrance & Jeffrey M. Perloff, 2010. "Milk Marketing Order Winners and Losers," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(1), pages 59-76.
    3. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    4. John M. Crespi & Stéphan Marette, 2007. "The Procompetitive Effect of Demand-Enhancing Check-Off Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(2), pages 389-401.
    5. Crespi, John M. & James, Jennifer S., 2007. "Bargaining rationale for cooperative generic advertising," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), pages 1-13.
    6. Yuqing Zheng & Harry M. Kaiser, 2009. "Evaluating the effectiveness of generic advertising versus nonadvertising marketing activities on New York State milk markets," Agribusiness, John Wiley & Sons, Ltd., vol. 25(3), pages 351-368.
    7. Tsunemasa Kawaguchi & Nobuhiro Suzuki & Harry M. Kaiser, 1997. "A Spatial Equilibrium Model for Imperfectly Competitive Milk Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 851-859.
    8. George C. Davis, 2005. "The Significance and Insignificance of Demand Analysis in Evaluating Promotion Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 673-688.
    9. Williams, Gary W. & Capps, Oral, Jr. & Palma, Marco A., 2007. "Effectiveness of Marketing Order 906 in Promoting Sales of Texas Grapefruit and Oranges," Reports 90752, Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center.
    10. John M. Crespi, 2003. "The Generic Advertising Controversy: How Did We Get Here and Where Are We Going?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 294-315.
    11. Gary W. Williams, 1999. "Commodity checkoff programs as alternative producer investment opportunities: The case of soybeans," Agribusiness, John Wiley & Sons, Ltd., vol. 15(4), pages 539-552.
    12. Ben C. French, 1982. "Fruit and Vegetable Marketing Orders: A Critique of the Issues and State of Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(5), pages 916-923.
    13. Gary D. Thompson & Charles C. Lyon, 1989. "Marketing Order Impacts on Farm-Retail Price Spreads: The Suspension of Prorates on California-Arizona Navel Oranges," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 647-660.
    14. Julian M. Alston & John W. Freebairn & Jennifer S. James, 2001. "Beggar-Thy-Neighbor Advertising: Theory and Application to Generic Commodity Promotion Programs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 888-902.
    15. Ippolito, Richard A & Masson, Robert T, 1978. "The Social Cost of Government Regulation of Milk," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 33-65, April.
    16. Richards, Timothy J. & Kagan, Albert & Mischen, Pamela & Adu-Asamoah, Richard, 1996. "Marketing Order Suspensions and Fresh Lemon Retail-FOB Margins," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 28(2), pages 263-277, December.
    17. Richards, Timothy J. & Kagan, Albert & Mischen, Pamela & Adu-Asamoah, Richard, 1996. "Marketing Order Suspensions And Fresh Lemon Retail-Fob Margins," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 28(2), pages 1-15, December.
    18. R. W. Ward & C. Lambert, 1993. "Generic Promotion Of Beef: Measuring The Impact Of The Us Beef Checkoff," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(3), pages 456-465, September.
    19. Neff, Steve & Plato, Gerald, 1995. "Federal Marketing Orders and Federal Research and Promotion Programs: Background for 1995 Farm Legislation," Agricultural Economic Reports 262014, United States Department of Agriculture, Economic Research Service.
    20. Ben C. French & Carole Frank Nuckton, 1991. "An Empirical Analysis of Economic Performance under the Marketing Order for Raisins," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(3), pages 581-593.
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    Cited by:

    1. Boland Michael A. & Crespi John M. & Turner Tracy M., 2014. "Measuring Sunk Costs in Agricultural and Food Industry Assets: Why Some Assets Sell Below Appraisal," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 1-11, January.

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    More about this item

    JEL classification:

    • D29 - Microeconomics - - Production and Organizations - - - Other
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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